The bank's non-performing assets consist of about 50%income-producing properties and 50% construction lending, says CFOTim Doyle. "The commercial stuff I'm concerned about, but we knowwe'll be OK because we loan in markets where there's high demand inreal estate," Doyle says, adding that the bulk of the bank'scommercial loans are in the Western US, including San Francisco,Los Angeles and San Diego.

While there are "People sitting on the sideline," Doyle says, "Idon't feel that we're going to have a lot of credit lossesassociated with income-producing properties. Our feeling is thatincome properties are situated in markets where there's going to bedemand for those properties."

As for residential related construction lending—in residential,the bank focuses on land development loans, track residentialdevelopment, condo conversion and ground-up condo project loans—itmay take time to recover from ongoing losses, but Doyle seeslong-term stability.